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8/27/2012 @ 9:55AM16,789 views

Navistar CEO Is Ousted As Board Hires Former Textron Boss To Steer Through Crisis

Navistar International’s board of directors this morning named Lewis B. Campbell, the former chief executive of Textron, to replace CEO Daniel C. Ustian, who retired abruptly after a failed strategy left the company fighting for survival. The board also promoted Troy A. Clarke, president of Truck and Engine operations at Navistar, to president and chief operating officer.

In a press release, the company said Ustian had informed the board that he is retiring as chairman, president, and CEO, effective immediately. Ustian also stepped down from the board of directors. A search for a long-term CEO will come “at the appropriate time,” said Navistar’s independent lead director, Michael N. Hammes.

Campbell is stepping into a difficult rescue mission. Navistar got into severe financial distress earlier this year after Ustian’s decision to break with the rest of the industry to pursue a diesel emissions technology that ultimately failed. His gamble was the diesel equivalent of choosing Betamax over VHS. Now Navistar must retool its entire product lineup to accept the more conventional technology used by its competitors, a challenge that is both costly and time-consuming.

Navistar’s pretax loss in the first half of 2012 was $516 million on revenues of $6.4 billion as new truck sales stalled out and quality problems on its earlier engines required Navistar to boost its warranty reserves by $227 million. Navistar shares have been punished, down more than 50% in the last 12 months, and it faces an investigation by the Securities & Exchange Commission.

Campbell, 66, led Textron Inc., an industrial company about the same size as Navistar, from 1994 until 2009. He stayed on as chairman for another year. Under his leadership, Textron underwent a significant transformation to boost efficiency, consolidate factories, sell non-core operations and increase new product development. Campbell initially joined Textron as Chief Operating Officer in 1992. Prior to joining Textron, Campbell spent 24 years at General Motors Co., where Clarke was also a longtime executive. Campbell holds a B.S. in mechanical engineering from Duke University.

Navistar said it granted Campbell 500,000 nonqualified stock options of Navistar common stock exercisable at $22.98 per share. The company said these options will be granted outside of Navistar’s current equity plan and Campbell will not otherwise participate in Navistar’s long-term incentive plan.

Acknowledging Navistar’s difficult challenges, Hammes said: “Our board and management are aligned around a clear path forward, and we are confident that under the leadership of Lewis and Troy, Navistar will make continuing progress in executing its near-term strategic priorities, driving growth and creating shareholder value.”

Hammes added, “We appreciate Dan’s many contributions and accomplishments during his 37-year career at Navistar. Under his leadership, Navistar’s revenue grew from approximately $7.7 billion to approximately $14 billion as the Company significantly expanded its global reach and diversified its product portfolio, including the addition of Navistar’s military business. We thank Dan for his dedicated service and wish him all the best in the future.”

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About time !!! Between Utstain and their VP of Government relations, Navistar has been mis-directed for several years. The 6.0 liter engine was a terrible product and started the company’s down fall. The firing of the VP of Government Relations can’t happen soon enough. While the VP of Engine Engineering, this clown destroyed a once excellent engineering organization. He’s strictly a political fish and nothing more.

This is a very positive move for International Truck and Engine Corp., This is going to be new Leadership, with new Ideas, I sure hope they will be Listening to the Dealer Network, On the Product offerings,ETC. This no-doubt is one of the very best news days, that we have had in a long time. I have sold International Trucks for 33 years Sept 1 st, Sure is nice to se a winning Team put together.

I’ve worked at a Textron owned company for over 14 years. 12.5 years under the poor leadership of Lewis Campbell. He was a member of Forbes magazines “Dirty Thirty” for most of those years. This is Forbes ranking of the Fortune 500′s worst 30 CEO’s. This guy saddled Textron with 9.5 BILLION dollars of debt in his last years at Textron. Navistar has lost 50% of its stock value? Campbell was with Textron over 14 years and its stock value dropped over 75% in his tenure. Terrible track record, look up Textron stock from October 1998 to March 2009, when Campbell left. Went from $99 per share to $24 per share and that includes a stock split. He left new Textron CEO Scott Donnely a huge mess to clean up. Big mistake for Navistar shareholders, and it dedicated employees.

Another old fashion CEO running things the he wanted. I am just stunned by the fact that this CEO completely missed out on the basics that is running the business means must meeting regulations in a timely manner. Let down employees and customers. Then he goes to get another $1B to operate the company. Do the right thing and declare bankruptacy..please.

Bankruptcy is not always the best solution. Many more people, including investors and suppliers, could get hurt, too. It will be a squeaker, but hopefully, Campbell and Clarke will steer the company back onto the right path.

Well, this is big news. He must have been pressured to leave. He has screwed up so badly for so long in so many ways.

But now, who in the world, with the necessary credentials, is willing to lead Navistar from this rocky point into the future long-term?

And does Navistar, realistically, have a financially sound enough footing to have a long-term future?

Troy Clarke is NOT a truck guy (Some previous time with GM medium trucks does NOT a real truck man make).

And Campbell, from Textron, has no commercial truck experience. Troy Clarke probably suggested him as they’d worked together at GM. The last thing Navistar needs is more non-truck GM people (Didn’t GM head into the hole of bankruptcy?).

While I’m not as young as I used to be, why hire a 66 year old individual at this critical juncture who has absolutely no commercial truck experience whatsoever? Does Troy Clarke think that “he’s” going to be Campbell’s advisor? That would be the classic case of “the blind leading the blind”. And Navistar’s had enough blind running already.

Navistar needs an astute heavy truck person at the helm, someone that will disassemble the culture of arrogance and ignorance fostered Ustian and Clarke.

Clarke and all his GM colleagues need to go back to GM or another car maker where they belong.

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In aviation, an airplane crash is the result of smalll links in a chain of events, which lead to a catostrophic failure… Please consider the following.

Problems at Navistar are systemic in origin.

The Navistar CEO resignation, comes after a string of recent mishaps, of making promises, without being able to deliver:

1. The Company was fired & sued, by Ford as its Powerstroke engine manufacturer. Warranty losses & missed deadlines contributed to this.

No accountability or corrections made…

2. Being dropped from NYSE during the earnings restatement.

Navistar chose to shift blame to its auditors rather than accept responsibility & change.

3. Nissan had contracted Navistar to build a V6 Diesel for the Titan pickup. Over 60 engines were built and failed to meet Nissan specifications.

Navistar raised the per engine price, to save face. It looks better to not be able to agree on terms, than to admit repeated engine failures.

4. Within the investing community, we all know & recognize the wisdom of divesification.

At Navistar, this was forgotten, as engine choice was removed as an option for the truck buying customer.

The Max Force design became Navistars sole offering. Now that the MaxForce design has failed to meet emissions & resulted in court rulings, Navistar has been left scrambling to implement a more costly, less profitable plan B using a Cummins engine…

5. One year ago, the Chief engineer incharge of the failed big bore program retired, just prior to the warranty losses being announced.

It never ceases to amaze me how companies continue to make the same mistakes over and over. It seems as though somewhere along the line they would learn that the best CEO for any company would be an experienced sales person who has been out there selling against the competition, then send the findings to engineering, then build it and bring it online to sell. Pretty simple concept! I mean after all, we are the ones hearing the objections, knowing what key decisions the clients are taking into consideration prior to making “their” buying decision. It’s humorous how they engineer things, then send them into the field to sell along with a factory rep that says, “this is how you pitch it”, when all along it was never what the client was looking for in.the first place! Anyways, good luck, it seems as though another American company has bass ackwards itself right out of a market!

Ford has used Navistar diesel engines for years. Ask anyone with a 2003 Navistar 6.0L engine in a Ford F350 what their experience has been. The only reason I won’t buy a Ford F150 eco V6 engine is their record on the Navistar diesel.